Sep 29, 2020
KARACHI: The Spot Rate Committee of the Karachi Cotton Association on Monday has increased the spot rate by Rs 50 per maund and closed it at Rs 8900 per maund. The local cotton market remained bullish on Monday after the release of the report which claims that cotton production will reduce.
Cotton Analyst Naseem Usman told that import agreements of 15 lac bales were signed. It is expected that 45 lac bales will be imported. He told that either there is a buyer of high quality cotton or low quality cotton in the market. However, here is hardly any buyer of mixed quality cotton.
Naseem told that the Economic Coordination Committee of the Cabinet Wednesday approved removal of Additional Customs Duties (ACDs) and Regulatory Duties (RDs) on 169 selected HS Codes of textile sector, including fibers, yarns and fabrics of Nylon, Viscose, Acrylic, Rayon, Silk, Wool and vegetable-based fibers like Hemp, etc. The summary was moved by Ministry of Commerce, after approval of the National Tariff Policy Board in its meeting held on August 24, 2020.
According to sources in Finance Division custom duty and additional custom duty on 169 tariff lines was ranging from 2 to 16 per cent and 2 to 7 per cent respectively.
Naseem told that August 2020 was supposed to be the low point in Pakistan’s external trade scorecard. Heavy monsoon rains across the country disrupted supply chain, with the destruction in Karachi particularly affecting the port activity. As a result, monthly figures for both goods imports and exports have recorded double digit decline.
Yet, textile group imports stand out, which recorded nearly 40 percent rise on a year-on-year basis. Why raw cotton imports. As per PBS Advance Releases, Pakistan recorded its highest ever raw cotton import bill for the month of August (on a seasonal basis) this year. In fact, raw cotton import volume during the month was 12.5 times higher than same month last year and 3.5 times higher than average August imports over the last decade.
Naseem told that according to the statistics released by Pakistan Cotton Ginners Association till September 15, 2020 10 lac 35 thousand bales were produced in the country which is 44.12% less as compared to the last years cotton production of 18 lac 52 thousand bales. He also told that textile imports will further increase as a result of which country’s economy will further deteriorate.
According to the first estimate released by Agriculture Crop Reporting Service, the sowing of cultivated area during 2020-21 season witnessed a decline of 12% owing to major reason behind this was non availability of good quality of seeds. The reason monsoon spell had caused huge loss in Sindh especially in the districts of Sanghar, Mirpur Khas, Umer Kot, Badin, Tando Allah Yar, Tando Muhammad Khan, Hyderabad and Dadu.
The report indicated that 25 % cotton crop in Sindh has been damaged quality and supply of seed cotton was affected. Picking was also affected due to rains. Similarly, the rains in cotton belt of Punjab have caused loss to cotton crop. The high moisture makes the cotton crop susceptible to Pink boll worm attacks. The pink boll worm attacks can damage around 20 to 30 percent of the crop and affect the lint quality. The farmers are advised to immediately drain out water from their fields.
He also told that this year due to torrential rains, unsuitable weather conditions, corona lock down and especially due to the substandard seeds cotton production was badly effected. Amid coronavirus cases increasing in competitor economies including India and Bangladesh, garment orders are rapidly shifting to Pakistan.
The Spot Rate Committee of the Karachi Cotton Association on Monday has increased the spot rate by Rs 50 per maund and closed it at Rs 8900 per maund. The polyester fiber was available at Rs 153 per kg. (Source: Business Recorder)